The deal gives Apple a bigger entry into the huge Chinese market.
BEIJING (AFP) - Chinese users welcomed a long-awaited
tie-up between Apple and China Mobile, the world's biggest wireless
operator, but analysts warned Monday that the deal's impact depends on
the quality of the carrier's 4G network.
The US technology giant and China Mobile on Sunday unveiled the
agreement to bring the iPhone to customers on a network with an
estimated 760 million subscribers and until now dominated by low-cost
Android smartphones.
The US company's iPhone 5s and iPhone 5c phones will be available at
China Mobile and Apple retail stores across mainland China starting
January 17, they said in a joint statement.
Chinese mobile phone users gave the deal a rousing ovation, hailing
it as "a marathon love affair that finally came to a happy ending", in
the words of one fan.
"It finally comes -- I've been waiting for so long that I'm
exhausted," a user with the online handle Gluttonous Miser posted on
Sina Weibo, a Chinese equivalent of Twitter.
Apple iPhones can currently be used on China Mobile's 2G network but
not on its higher-speed 3G network due to a home-grown standard the
carrier has adopted.
While users were generally upbeat, some raised concerns about the cost of the devices to be offered by China Mobile.
"Come on, the price must not let us down, it has to be encouraging,
better not to go over 4,000 yuan ($660)," wrote another user.
The unsubsidised price of the iPhone 5, a model with slightly reduced
cost to appeal to budget-conscious consumers, is $550 in the United
States but higher in other countries, often due to tax and regulatory
costs. In China the 5c sells at more than $700.
Negotiations between Apple and China Mobile took years, with one key
hurdle reportedly being the US company's demand for sales volume
guarantees.
The deal gives Apple a bigger entry into the huge Chinese market, as
the company is facing declining market share and seeking to counter the
flood of low-cost smartphones from rivals.
Even though iPhone sales grew 25.6 percent in the third quarter from a
year earlier, growth was slower than the overall market and Apple's
market share fell to 12.9 percent from 14.4 percent in the same period
last year, according to a survey by market intelligence firm IDC.
But analysts said that the immediate benefit from the partnership
will be limited given that many of China Mobile's customers are already
using iPhones, lessening the prospect of a sharp boost to sales.
They said the main rationale for the deal was likely both companies'
strategy in the 4G era, which will allow users to -- among other things
-- watch movies and play games on mobile networks at a much faster speed
and in better quality.
In the statement, Apple and China Mobile said the iPhone 5s and
iPhone 5c "both offer more 4G LTE bands than any other smartphone in the
world."
"The collaboration between Apple and China Mobile will give a big
boost to the development of China's homegrown 4G/TD-LTE technology," it
said.
China granted three state-owned operators licenses early this month
to offer services on the new network, and China Mobile is rolling out
the world's biggest 4G network.
"If (China Mobile's) 4G network comes online (with good quality), the
impact will be rather big," Xu Zhipeng, a Beijing-based analyst with
research firm Zero2ipo Group, told AFP.
However, given the operator's problem-prone 3G network, it will take
time for Chinese users to build up confidence and accept the new
network, he said.
"Customers may take a wait-and-see attitude towards its 4G network
and will not rush to (grab an iPhone) as its price is rather high," Xu
said.
